Bangladesh: The Benefit That Almost Wasn't

The need was immediate, sitarist Ravi Shankar told his friend, Beatle George Harrison. Floods had killed 40,000 people in Shankar's native Bangladesh. Millions were homeless. The scope of the disaster exceeded human imagination.

That conversation took place not last week, after nature went on a rampage with a killer cyclone and flooding that devastated Bangladesh and killed tens of thousands.

It took place 14 years ago, when flooding ravaged Bangladesh and Third World poverty was a subject that concerned few Americans.

Shankar's pleas moved Harrison to organize a benefit concert. It was decided that the proceeds would be pledged specifically to help children. That would make it politically less risky, since Bangladesh then was ravaged by civil war and the United States didn't recognize the emerging government.

FOR THE RECORD - IMPERFECTIONS & RECANTATIONS Los Angeles Times Sunday June 9, 1985 Home Edition Calendar Page 95 Calendar Desk 3 inches; 77 words Type of Material: Correction CLOSE CAPTIONED: Fans of guitarist Jesse Ed Davis, including David Ballard of North Hollywood and Daryl Caraco of Canoga Park, leaped to their loose leaf to point out that it was Davis, not Jim Horn, on stage with George Harrison, Eric Clapton and Klaus Voorman at the Concert for Bangladesh, as we mis-captioned a photo in David Johnston's article June 2. Oddly, in the same article the name of former Capitol Records marketing VP Brown Meggs' was transposed, becoming Meggs Brown, a crime for which Johnston David has accepted full responsibility.

The 75 stars, including Bob Dylan, Ringo Starr and Eric Clapton, billed themselves George Harrison and Friends. They staged the heralded Concert for Bangladesh on Aug. 1, 1971, in Madison Square Garden.

For the first time, rock 'n' roll met charity on a grand scale. It opened a new era of rock musicians as philanthropists who were as interested in helping Third World multitudes as in finding groupies and tax shelters.

The Concert for Bangladesh began a rock-star movement beyond the love-and-peace theme of opposing America's war in Vietnam to espousing the cause of the Third World poor, whose plight lacked the drama, as well as the popular and media attention, of combat.

The concert, a three-disc album and audio cassette and a film held the promise of millions of dollars to aid the children of Bangladesh. Americans responded generously. The concert--actually there were two that day--quickly sold out, and the press even donated $12,000 instead of just accepting the usual free tickets for covering a concert.

So far, nearly $12 million has been sent to Bangladesh as a result of the concert proceeds and subsequent investments.

But there was one major problem: 85% of that money did not get to to Bangladesh for more than a decade, long after the 1971 flood waters had ebbed and a stable government assumed power, according to reports by the U.S. Committee for UNICEF.

During those years, more than eight million Bangladeshi children died of starvation and disease, according to an estimate by UNICEF, the permanent United Nations fund for children.

The catastrophic delay arose because the proceeds were handled by a profit-making company--the Beatles' record concern, known as the Apple Corp.--instead of a legally qualified charity. (The Beatles' business has no connection to the Apple Computer firm.)

Flinty eyed auditors from the Internal Revenue Service, reviewing Apple Corp. records, looked skeptically at claims that the Concert for Bangladesh money consisted of tax-exempt charity dollars. They ruled it was business income and thus taxable, according to an attorney at the U.S Committee for UNICEF.

Untangling the mess took 11 years.

How profits got in the way of charity in the Bangladesh concert--and how Uncle Sam took some of the money--illustrates how the most charitable of intentions can go awry.

The problems that tied up the proceeds hold important lessons for Americans buying records and products, as well as donating money, to the rapidly proliferating groups organized by entertainers to help Earth's destitute multitudes, as well as to other charities.

Just how much money could, or should, have gone to Bangladesh remains a mystery because the principals refuse to divulge basic information about the concert finances.

How much the concert, recordings and film earned in gross revenues, how much costs totaled and what those costs were, how much was paid in taxes and penalties, at what interest rates the proceeds were invested and other basic information is all being kept secret by the principals.

There is no suggestion that any of the proceeds were diverted or misused, especially since they were under watchful IRS eyes for more than a decade.

But beyond that, about all that is known for certain is that to date just under $12 million has been turned over to the U.S. Committee for UNICEF, $10 million of it since 1982.

Further complicating matters, both the Beatles' manager and promoter were indicted in Manhattan on federal income tax charges for allegedly selling thousands of promotional copies of the Bangladesh album and pocketing the proceeds. Ultimately one of the men pleaded guilty and testified against the other, who was acquitted.

The promoter, Peter Benadetto, who works under the name Pete Bennett, pleaded guilty in 1977 and testified against Allen Klein, who was then the Beatles manager. Bennett was hailed as the "World's Top Entertainment Promotion Man" in a 16-page special advertising section in Billboard magazine last October filled with adulatory advertisements bought by business associates and performers.